Latest from GIFC

Tuesday, 21 July 2015

Investments help to lift Sharjah Islamic Bank profit

Sharjah Islamic Bank said its net profit for the first half increased 1.2 per cent, boosted in part by a jump in the value of its investments.

Net income rose to Dh204.6 million in the first six months of the year compared to Dh202.1m in the corresponding period last year.

The value of its investments jumped 42 per cent to reach Dh2.2 billion compared to Dh1.6bn in the same period last year.

The bank’s deposits rose 7 per cent to Dh27.8bn at the end of the second quarter compared to Dh26bn at the end of the second quarter last year.

The lender did not provide a breakdown of its profit for the second quarter.

Separately, Invest Bank, another Sharjah-based lender, said its second quarter net income decreased less than 1 per cent as gains in fees and commissions were weighed down by losses in the value of its investments.

Net income fell to Dh97.4m from Dh98.2m in the same period last year, the bank said. Net fees and commission income rose 33 per cent to Dh46.7m from Dh35.1m, but net income from investment securities at fair value fell to Dh6.9m from Dh23.5m in the corresponding period last year.

The report did not say which securities the bank invests in, but many lenders in the UAE have exposure to the local stock market which has been volatile amid the collapse in the price of oil.

The price of crude, to which the fortunes of the UAE economy is tied, has dropped 1.3 per cent this year. Last year the price of crude shaved 48 per cent of its value.

Like most UAE lenders, Invest Bank is making moremoney from fees and commissions. That is because amid a spate of low interest rates, the returns banks have been making from giving out loans have been dwindling, forcing them to offer customers more services from asset management to trade finance.